MORITOMO GAKUEN

Abe stands his ground as Moritomo Gakuen scandal drags on

More than a month has passed since nationalistic school operator Moritomo Gakuen first made headlines over a controversial land deal for its next school.

With fresh revelations piling up daily against the Osaka-based company, the scandal has also engulfed the Diet, particularly the ruling Liberal Democratic Party, its leader, Prime Minister Shinzo Abe, as well as his wife, Akie.

But what is the central issue and why is the scandal impacting the political world, and Abe’s administration?

Following are questions and answers on the saga:

How did the scandal start?

The scandal broke when the daily Asahi Shimbun reported Feb. 9 that Moritomo Gakuen had bought from the central government an 8,770-sq.-meter lot in Toyonaka, Osaka Prefecture, last June for an estimated ¥134 million — about one-tenth of the price of comparable nearby land.

The suspicious land deal initially drew attention because Akie Abe was to serve as the honorary principal of Mizuho no Kuni, a private elementary school Moritomo Gakuen planned to build on the land.

Moritomo Gakuen runs an Osaka kindergarten known for an ultranationalist education style based on Shintoism, and the Toyonaka school was expected to operate in a similar manner.

During Diet sessions, opposition lawmakers argued that some lawmakers may have pressured the Finance Ministry to provide a discount on the land and offer other favorable conditions to Moritomo Gakuen because Akie Abe had accepted the honorary post.

Prime Minister Abe denied that he, his wife or his office were involved in the land deal, vowing he would resign as prime minister and as a Diet member should his comments prove false.

Later in February, Akie Abe stepped down as honorary principal amid rising criticism of her decision to accept the position.

The media storm, meanwhile, raged on as reports alleged the Finance Ministry offered other unusually favorable conditions to Moritomo Gakuen during the land negotiations.

Moritomo Gakuen President Yasunori Kagoike, who announced Friday his plans to resign, is a “management member” of the Osaka branch of the Japan Conference (Nippon Kaigi), Japan’s largest nationalist lobby group, one reason the land deal caught the attention of overseas media.

On Feb. 21, Nippon Kaigi released a statement claiming it had nothing to do with the land deal between Moritomo Gakuen and the Finance Ministry.

Can the Finance Ministry defend the transaction?

It has defended the deal in terms of it including unforeseen costs.

In May 2015, the Finance Ministry concluded a land-lease contract with Moritomo Gakuen on the condition that the school operator purchase the land within 10 years.

Later, industrial waste, including concrete, wood and plastic, was reportedly found in the soil.

A third-party real estate appraiser estimated the value of the land plot at ¥956 million, but the Finance Ministry estimated it would cost ¥819 million to remove the industrial waste. The ministry said it discounted that amount from the appraised value and sold the land for ¥134 million in June 2016.

What’s suspicious about the land deal?

A major issue is whether the 86 percent discount was justified.

How the waste removal cost was calculated has not been made clear. The Osaka Aviation Bureau of the infrastructure ministry calculated the cost, but during an Upper House session on March 1, the ministry admitted the bureau had no previous experience in estimating waste disposal costs.

The government separately paid more than ¥131.76 million to Moritomo Gakuen to help decontaminate the land before it was sold.

This means the net income from the land sale for the central government was only about ¥2 million. By contrast, the government sold an adjacent 9,492-sq.-meter lot for ¥1.423 billion to the Toyonaka Municipal Government in 2010.

“The government gave up the national property for almost nothing,” Democratic Party lawmaker Nobuhiko Isaka said at a Lower House plenary session on Feb. 27.

Has anything illegal been reported?

No evidence has surfaced that laws were violated during the land deal, somewhat nullifying some of the opposition camp’s arguments against the LDP.

The opposition suspects that ruling bloc lawmakers pressured the Finance Ministry to give Moritomo Gakuen favorable conditions on the land purchase.

Ministry officials claimed they followed internal rules and had already discarded documents recording the details of the negotiations with Moritomo Gakuen, raising concerns that a further investigation would be difficult.

LDP lawmakers maintain that because there appears to be no evidence the law was broken, no one should be summoned to testify before the Diet and no full-fledged investigation should be launched.

A nationwide telephone survey conducted by Kyodo News over the weekend, meanwhile, found that 86.5 percent of respondents viewed the purchase of the heavily discounted land as inappropriate.

The poll also showed 74.6 percent of respondents want Kagoike summoned to the Diet so lawmakers can get to the bottom of the land deal.

Why did Moritomo Gakuen withdraw its request to open the Mizuho no Kuni Elementary School?

The withdrawal on Friday was because the Osaka Prefectural Government had already indicated it would reject the request.

Through Diet sessions and media reports, it was revealed that Moritomo Gakuen made a number of serious false statements — if not lies — about its elementary school plan.

For example, it was revealed that Moritomo Gakuen had submitted three vastly different construction cost estimates — the figure it sent to the central government amounted to ¥2.18 billion, the one sent to the Osaka Prefectural Government was ¥756 million and the quote given to the operator of Osaka international airport was ¥1.5 billion.

This has led many to suspect Moritomo Gakuen submitted different figures to maximize public subsidies for the project, according to media reports.

Osaka Gov. Ichiro Matsui said it would be “practically impossible” to allow the school to open because the prefecture now must re-examine the application papers submitted by Moritomo Gakuen.

How have voters and LDP lawmakers reacted?

According to a poll conducted by the Mainichi Shimbun on March 11 and 12, 75 percent of 1,012 respondents said they are not satisfied with the government’s explanation of the land deal.

But the same poll also showed the support rate of Prime Minister Abe’s Cabinet was still high, at 50 percent, though 5 points down from the previous poll last month.

This high voter support for Abe’s government has apparently encouraged the LDP-led ruling camp to stand its ground and continue to reject calls from the opposition to summon witnesses and launch a parliamentary investigation into the suspicious land sale.

Inside the LDP, no rival politician appears powerful enough to challenge Abe over the Moritomo Gakuen scandal, and so far, Abe’s political power has yet to be seriously dented.